At 14:26 IST, the barometer index, the S&P BSE Sensex, was down 592.35 points or 1.02% to 57,397.55. The Nifty 50 index declined 173.10 points or 1.01% to 16,926.95.

In the broader market, the S&P BSE Mid-Cap index slipped 1.52% while the S&P BSE Small-Cap index fell 1.32%.

Sellers outnumbered buyers. On the BSE, 946 shares rose and 2,622 shares fell. A total of 128 shares were unchanged.

Investors reacted negatively to news of a Credit Suisse bailout by its bigger rival UBS. On Sunday, Switzerland's biggest bank, UBS, agreed to buy Credit Suisse in an emergency rescue deal aimed at stemming financial market panic unleashed by the failure of two American banks earlier this month, media reports stated.

UBS is paying 3 billion Swiss francs ($3.25 billion) for Credit Suisse in an all-share deal, about 60% less than the amount the bank was worth when markets closed on Friday, the reports added. Credit Suisse investors will reportedly get one UBS share for every 22.48 Credit Suisse shares held.

Meanwhile, caution prevailed ahead of the US Federal Reserve's meeting outcome due later this week. Investor will keep on eye on the actions of the American Central Bank to see how it will proceed in its fight against inflation in light of the shakeup in the banking sector.

Numbers to track:

The yield on India's 10-year benchmark federal paper declined to 7.328 from 7.354 previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.6425, compared with its close of 82.5950 during the previous trading session.

MCX Gold futures for 5 April 2023 settlement advanced 1.54% to Rs 60,300.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.15% to 103.86.

The United States 10-year bond yield slipped 2.24% to 3.321.

In the commodities market, Brent crude for May 2023 settlement was down $2.38 or 3.26% to $70.59 a barrel.

Buzzing Index:

The Nifty IT index declined 1.83% to 28,325.85. The index rose 1.18% in the past trading session.

Coforge (down 3.82%), Mphasis (down 3.77%), Wipro (down 2.95%), Persistent Systems (down 2.78%) and Tata Consultancy Services (down 2.36%), Tech Mahindra (down 2.34%), Infosys (down 1.78%), HCL Technologies (down 1.67%), L&T Technology Services (down 1.26%) and LTI Mindtree (down 0.47%) declined.

Stocks in Spotlight:

Ahluwalia Contracts (India) declined 0.87% after the company announced on Monday that it has secured an order for construction of cancer hospital building in Mumbai for about Rs 723.34 crore.

Adani Tranmission slipped 2.50% after the company on Friday announced that it has incorporated a wholly owned subsidiary, Adani Electricity Nashik (AENL), on 16 March 2023, with an authorized and paid-up share capital of Rs 1 lakh each.